The FINANCIAL — Nestle reported on August 13 decreased profit for the first half of 2015, reflecting a sales drop amid the negative impact of foreign exchange rate. Nestle also confirmed its organic growth outlook for the full-year 2015, according to Nasdaq.
The Vevey, Switzerland-based maker of Maggi noodles and Nescafe reported net profit attributable to shareholders of the parent of 4.52 billion Swiss francs for the first half of 2015, lower than 4.63 billion francs in the prior-year period.
Earnings per share declined to 1.43 franc from last year’s 1.45 franc. Underlying earnings per share, however, rose 7.3 percent in constant currencies.
Total group sales for the period edged down to 42.84 billion francs from 42.98 billion francs in the same period last year.
Sales were negatively impacted by 5.8 percent due to foreign exchange rates.
The company also has been facing a crisis of reputation in India when it had to recall Maggi instant noodles from stores across the country, after certain tests found excess levels of lead. Nestle said this caused negative organic growth, which will continue into the second half.
Organic growth was 4.5 percent, comprising of 1.7 percent real internal growth and 2.8 percent pricing, with broad-based growth across categories and geographies.
The firm said organic growth was 6.6 percent in the Americas or AMS, 3.4 percent in Europe, Middle East and North Africa or EMENA and 2.2 percent in Asia, Oceania and sub-Saharan Africa or AOA. Real internal growth was 1.7 percent in AMS, 2.4 percent in EMENA and 0.6 percent in AOA.
On a reported basis, Zone AMS sales decreased 1.3 percent to 11.99 billion francs, Zone EMENA sales declined 9.4 percent to 7.92 billion francs, and sales in Zone AOA edged down 0.3 percent to 7.07 billion francs from last year.
Nestlà Waters sales increased 2.7 percent to 3.77 billion francs, while organic growth was 5.3 percent and real internal growth was 5.6 percent. Nestlà Nutrition sales edged down 1.0 percent to 5.28 billion francs, while organic growth was 3.9 percent and real internal growth was 1.3 percent.
Sales improved 13.5 percent for other businesses to 6.81 billion francs, while organic growth was 8.1 percent and real internal growth was 4.9 percent.
“Our investments in the new growth platforms Nestlà Health Science and Nestlà Skin Health are delivering and complement the good momentum in our food and beverages businesses. This allows us to confirm the outlook for the full year,” CEO Paul Bulcke said.
Looking ahead to 2015, Nestle said it aims to achieve organic growth of around 5 percent with improvements in margins, underlying earnings per share in constant currencies and capital efficiency.
In Thursday’s trading session in Zurich, Nestle shares are currently trading at 73.80 francs, up 1.60 francs or 2.22% on a volume of 1.31 million shares.
